Mustang Resources to merge ruby assets with Fura Gems for $10m

Mustang Resources has entered into a merger agreement with Toronto- and Dubai-based Fura Gems, a new gemstone mining company with emerald and ruby assets in Mozambique and Colombia.

Under the agreement, Fura will secure the controlling ownership in various entities that are owned by Mustang, which allows the former to acquire three mineral concessions, all ruby processing plant infrastructure and the existing site of the Montepuez ruby project in Mozambique.

These will be paid for with $10 million in Fura shares over 20 months, on top of a $25 million commitment by Fura to fund Montepuez’s drilling, bulk sampling and production mining. In return, Mustang will earn an 8 per cent stake in Fura.

The asset merger will enable Mustang to focus solely on its Caula graphite-vanadium project, where a host of high-grade drilling results and exceptional graphite metallurgical results have been generated recently.

First output at Caula is scheduled to take place in the June quarter of 2019.

Mustang managing director Bernard Olivier said, “Both Montepuez and Caula are outstanding assets in their own rights with substantial growth prospects. But the reality is that they don’t sit together comfortably in a publicly listed company, where investors tend to have an interest in one or the other of these very different businesses.

“This merger will benefit Mustang shareholders by giving them ongoing exposure to the ruby assets and Fura’s other ruby and gemstone assets via the shares in Fura.”

Concurrently, Fura has entered into an asset merger transaction with the Mozambican-focused mining and exploration company Regius Resources Group for an additional $5 million.

The two agreements will give Fura a total of nine mineral exploration licences in Mozambique.

Fura president and chief executive Dev Shetty said, “Based on our extensive work in-country, we believe these combined licenses to be some of the highest quality ruby licenses available in Mozambique.”

Following the execution of the acquisition, Fura will commence bulk sampling project at Montepuez to complement its iconic Coscuez emerald mine in Colombia. Mustang has done the initial ground work including significant exploration and construction of two wash plants.

The Mustang-Fura transaction will be completed by the end of November this year, subject to approvals from the ASX and the Mozambican Minister of Mineral Resources and Energy.

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